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HADNOTT v. LAIRD

August 28, 1970

Isiah Hadnott et al., Plaintiffs
v.
Melvin R. Laird, United States Secretary of Defense et al., Defendants. American Can Company and Scott Paper Company, Intervenor-Defendants


Jones, District Judge.


The opinion of the court was delivered by: JONES

This action is brought by 115 plaintiffs on their own behalf and "on behalf of all black employees, applicants for employment, and prospective applicants for employment at the Southern facilities" of eleven companies which are major suppliers of paper products to the Department of Defense or the General Services Administration or both. *fn1" Injunctive and declaratory relief is sought against the two defendants, the Secretary of Defense and the Administrator of General Services Administration. Specifically plaintiffs request this Court (1) to enter a declaratory judgment that the award of government contracts by the defendants, their agents and employees, to the companies named in the complaint, and to the latters' prime contractors, and the failure of defendants to enforce against the companies their contractual commitment to non-discrimination, involves the Federal Government in racially discriminatory practices, and constitutes Federal support and approval of those practices, in violation of the rights of plaintiffs and the class they represent under the due process clause of the Fifth Amendment to the United States Constitution; and (2) to enjoin the Secretary of Defense and Administrator of General Services Administration from awarding any further contracts to the companies and to require the defendants to cancel or terminate the existing government contracts with those companies until such time as all racially discriminatory employment practices have been eliminated.

 Defendants have moved to dismiss this action, or in the alternative, for a summary judgment.

 American Can Company and Scott Paper Company are two of the companies about whose employment practices plaintiffs complain. These companies have intervened as defendants. They have filed a joint motion to dismiss.

 Plaintiffs allege in their complaint that the companies named therein have failed to comply with their contracted commitment to non-discrimination by denying or limiting Negro employees promotions while granting promotional rights to white employees; by discouraging or preventing Negro employees from transferring to jobs formerly held by white employees only; by using written personnel tests, which have not been shown to be predictive of job performance, as a condition of hiring or promotion or transfer which tests disqualify Negro applicants and employees in substantially greater proportion than they disqualify white applicants and employees; and by failing to take affirmative steps in the recruitment of Negro applicants for employment at all levels that would eliminate the continued effects of prior overt racial discrimination and prior reservation of the more desirable jobs to white employees.

 The "contracted commitment to non-discrimination" by the companies is a provision in each of their contracts required to be a part thereof by Executive Order 11246, as amended. 30 F.R. 12319, 32 F.R. 14303, 34 F.R. 12985. *fn2" There it is provided, among other things, that government contracts shall set forth the following:

 
The contractor will not discriminate against any employee or applicant for employment because of race, creed, color, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin. Such action shall include, but not be limited to the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.
 
The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause.

 The plaintiffs do not, nor could they, complain that the Secretary of Defense and the Administrator of General Services Administration have entered into and are about to enter into contracts that discriminate against them because of their color. The quoted provision is designed to bring about a contrary result. The gist of plaintiffs' demand is that those officers be compelled to abrogate existing contracts with the companies named and be prohibited from entering into further contracts with those companies, even though such contracts do and would expressly prohibit discriminatory employment practices by the companies.

 The defendants Secretary and Administrator assert that this action, with the relief sought, is a suit against the United States which has not consented to be sued and for that reason it must be dismissed. The defendants point out that the contracts are not entered into in the names of those officers but rather are between the United States and the paper and pulp companies. No charge is made that in entering into the contracts in the name of the United States the defendants acted in excess of any statutory power. Rather the wrongs charged against the defendants are that they have failed to enforce against the companies their contractual commitments not to discriminate, which failure, so the plaintiffs assert, violates their Fifth Amendment rights. In short, what the plaintiffs ask of this Court is that it exercise judicial power over the administration of valid government contracts.

 Defendants assert that Larson v. Domestic and Foreign Corp., 337 U.S. 682, 93 L. Ed. 1628, 69 S. Ct. 1457 (1949) controls this action and calls for its dismissal. In Larson the plaintiff complained that the War Assets Administrator sold coal to it but the Administrator refused delivery and instead entered into another contract to sell the coal to other parties. Plaintiff sought to enjoin the Administrator from selling or delivering the coal to anyone other than it. Plaintiff also requested a declaratory judgment as to its rights under its contract for the coal. The doctrine of sovereign immunity barred the action was the ruling of the Supreme Court. It pointed out that the relief sought was in fact against the United States and not against the officer acting in his individual capacity and since the sovereign had not consented to be sued the court had no jurisdiction. In so ruling the Supreme Court stated (337 U.S. at 688, 689):

 
The question becomes difficult and the area of controversy is entered when the suit is not one for damages but for specific relief: i. e., the recovery of specific property or monies, ejectment from land, or injunction either directing or restraining the defendant officer's actions. In each such case the question is directly posed as to whether, by obtaining relief against the officer, relief will not, in effect, be obtained against the sovereign. For the sovereign can act only through agents and, when an agent's actions are restrained, the sovereign itself may, through him, be restrained. * * * the compulsion, which the court is asked to impose, may be compulsion against the sovereign, although nominally directed against the individual officer. If it is, then the suit is barred, not because it is a suit against an officer of the Government, but because it is, in substance, a suit against the Government over which the court, in the absence of consent, has no jurisdiction.
 
The relief sought in this case was not the payment of damages by the individual defendant. To the contrary, it was asked that the court order the War Assets Administrator, his agents, assistants, deputies and employees and all persons acting under their direction, not to sell the coal involved and not to deliver it to anyone other than the respondent. The district court held that this was relief against the sovereign and therefore dismissed the suit. We agree.

 See also Malone v. Bowdoin, 369 U.S. 643, 8 L. Ed. 2d 168, 82 S. Ct. 980 (1962), Dugan v. Rank, 372 U.S. 609, 10 L. ...


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